Construction Work-in-Progress Schedule Template & Guide (2026)

A construction project can appear profitable until rising labor costs, material expenses, or delayed billings start affecting your margins. A construction work-in-progress (WIP) schedule helps you monitor project costs, track earned revenue, and identify potential profitability and billing issues before they become bigger problems.

Here's a quick overview of the seven steps to complete your WIP schedule:

Free construction WIP schedule template

Use our downloadable Excel template to prepare monthly WIP reports and monitor the financial performance of multiple construction projects in one place. Review project completion, expected profitability, and overbilling or underbilling to identify jobs that need closer attention.

The workbook includes three worksheets:

• WIP schedule: A ready-to-use template with space for 25 projects, built-in formulas, and summary totals.
• Completed example: Three sample construction projects showing how the calculations work, including projects with overbilling and underbilling.
• Instructions: Guidance on entering project information, understanding the formulas, and reviewing the results.

Note: The template uses the cost-to-cost method to estimate project completion and earned revenue. These calculations are useful for monitoring project performance, but revenue recognition for financial reporting must follow the applicable accounting standards and contract terms.

Why you can trust Fit Small Business

I have over 10 years of experience in banking and financial management, along with hands-on experience managing bookkeeping and accounting for US businesses. My work includes tracking expenses, reconciling accounts, preparing financial reports, and reviewing financial performance to help business owners make informed decisions.

As a QuickBooks Online and Xero-certified advisor, I understand how important accurate cost tracking and timely reporting are to maintaining profitability. For this guide, I've applied my accounting experience to explain how construction businesses can prepare and interpret a WIP schedule, identify potential cost overruns, and monitor project profitability using a practical Excel template.

JR Suralta

Certified QuickBooks Online ProAdvisor and Certified Xero Advisor

What is a construction work-in-progress schedule?

A construction work-in-progress (WIP) schedule is a financial report that tracks the progress and profitability of ongoing construction projects. It compares contract values, actual costs, estimated costs to complete, revenue earned, and customer billings. Contractors use this report to monitor project profitability, identify cost overruns, and determine whether they're billing customers in line with the work completed.

For example, suppose you're managing a $500,000 office renovation project. You've spent $240,000 and expect another $160,000 in costs to finish the job. Using the cost-to-cost method, the project is 60% complete, with $300,000 in earned revenue. If you've billed the customer only $275,000, your WIP schedule would show a $25,000 underbilling, which you can review against your contract's billing terms.

WIP schedule vs. job costing report

A WIP schedule and a job costing report both help you monitor construction expenses, but they answer different financial questions.

These reports work together. Your job costing report provides the actual expenses needed to prepare the WIP schedule, while the WIP schedule combines those expenses with updated cost estimates, contract values, and customer billings to give you a broader picture of project performance.

For example, QuickBooks Online Advanced can help you track project income and expenses and compare actual costs against estimates. You can then use that information, along with your updated cost-to-complete estimates and billing records, to complete the downloadable WIP schedule.

To learn how to track and organize project expenses, check out our Job Costing Template & Guide for Small Businesses, which includes a free template and step-by-step instructions.

Why construction businesses need a WIP schedule

Construction projects often involve months of labor, material purchases, subcontractor payments, and customer billings. As costs accumulate and project estimates change, contractors need a reliable way to monitor their financial performance. A WIP schedule brings these figures together, helping business owners make informed decisions while projects are still underway.

Here are the main reasons construction businesses should maintain a WIP schedule:

• Monitor project profitability: Compare contract values against updated cost estimates to determine the profit you can expect upon completion. This helps you identify projects with shrinking margins before they become unprofitable.
• Identify cost overruns early: Track actual spending and estimated remaining costs to spot projects exceeding their budgets. For example, unexpected labor expenses may require you to revise your completion estimates and investigate where costs are increasing.
• Track overbilling and underbilling: Compare earned revenue against customer billings to identify projects that are ahead or behind their billing schedules. This helps you review upcoming invoices and ensure completed work is billed according to contract terms.
• Improve cash flow planning: Identify projects where expenses are accumulating faster than customer billings. You can use this information to plan subcontractor payments, material purchases, and upcoming cash requirements.
• Support accurate financial reporting: Use project costs, completion estimates, and earned revenue calculations to support revenue recognition and identify contract assets or liabilities when applicable.

A WIP schedule is especially valuable when you're managing multiple construction projects. Reviewing it monthly helps you identify which jobs need attention, update cost estimates, and address billing issues before they affect your overall financial performance.

What should a construction WIP schedule include?

A construction WIP schedule combines project costs, contract values, completion estimates, and customer billings to show the financial status of each ongoing job. Some information comes directly from your accounting records, while other figures require updated estimates from your project manager or contractor.

Our downloadable WIP report template includes the following components:

The accuracy of your WIP schedule depends heavily on your estimated cost to complete. For example, if a project manager expects additional labor or material costs but doesn't update the estimate, the report may overstate the project's completion percentage, earned revenue, and expected profitability.

How to complete a construction WIP schedule using our template

Our downloadable work in progress report template has built-in formulas that calculate project completion, earned revenue, estimated profitability, and overbilling or underbilling. You only need to enter your project details, contract amounts, actual costs, remaining cost estimates, and customer billings.

To demonstrate how it works, we'll use the office renovation project from the workbook's Completed example worksheet. You can follow along using the same figures or open the WIP schedule worksheet to enter your own project information.

Step 1: Enter your project and contract information

Start by entering the project ID, project name, and status in columns A through C. Use a unique project ID that matches your accounting records so you can easily identify the corresponding income, expenses, and customer invoices.

Next, enter the original contract amount in column D and any approved change orders in column E. The template automatically calculates the revised contract value in column F.

For our office renovation example:

Only include approved changes that meet the applicable requirements for inclusion in the contract value. Keep pending change orders separate until their accounting treatment has been assessed.

Step 2: Record actual job costs incurred to date

In column G, enter the total project costs incurred through your reporting date. These typically include direct labor, construction materials, subcontractor charges, equipment costs, and allocable project overhead.

For our example, the contractor has incurred $240,000 in project costs.

You can obtain these figures from your job costing records or accounting software. If you're using QuickBooks Online Advanced, review the income and expenses assigned to the project and verify that all relevant costs have been recorded.

Make sure to include incurred costs that haven't been paid yet, such as subcontractor bills awaiting payment. Also, check for transactions assigned to the wrong project, since these can distort your completion calculations.

Step 3: Estimate the remaining cost to complete

Enter the estimated cost required to finish the project in column H. This should reflect the latest information from your project manager, including remaining labor, materials, subcontractor work, and other expected expenses.

For the office renovation, the contractor expects another $160,000 in costs.

The template adds this amount to the actual costs incurred to calculate the estimated total project cost in column I.

Estimated total cost = Costs incurred to date + Estimated cost to complete

$240,000 + $160,000 = $400,000

This estimate should be updated whenever project conditions change. For example, if additional labor is needed or material prices increase, the estimated cost to complete should reflect those changes.

Step 4: Calculate the percentage of completion

Column J automatically calculates the project's percentage of completion using the cost-to-cost method.

Percentage complete = Costs incurred to date ÷ Estimated total cost × 100

$240,000 ÷ $400,000 × 100 = 60%

This means the project is estimated to be 60% complete based on eligible costs incurred relative to expected total costs.

The template caps the calculated completion percentage at 100%. However, you should investigate any situation where recorded costs exceed the estimated total cost, since it may indicate an outdated estimate or a reporting error.

Also, some costs, such as certain uninstalled materials or abnormal waste, may require adjustments when measuring progress for revenue recognition.

Step 5: Determine earned revenue and estimated profit

Once the completion percentage is calculated, the template determines earned revenue in column K by multiplying the revised contract value by the percentage complete.

Earned revenue = Revised contract value × Percentage complete

$500,000 × 60% = $300,000

The template also calculates estimated gross profit in column O and forecast gross profit margin in column P.

These figures help you evaluate whether the project is still expected to achieve its targeted margin.

Remember that the earned revenue calculation is a simplified estimate based on cost-to-cost progress. Revenue recognition for financial statements depends on the contract and applicable accounting standards.

Step 6: Enter customer billings and review the billing position

In column L, enter the total amount invoiced to the customer through the reporting date. Include applicable progress invoices, but avoid counting sales taxes collected on behalf of tax authorities as contract revenue.

The template compares cumulative billings against earned revenue and automatically calculates underbilling in column M or overbilling in column N.

For our example:

The $25,000 underbilling means the contractor has earned more revenue than has been invoiced. Review the contract's billing milestones and supporting documentation to determine when the additional amount can be billed.

If customer billings exceed earned revenue, the difference appears in the overbilling column. Overbilling may result from advance payments or progress billing arrangements and doesn't automatically indicate an accounting error.

Step 7: Review the completed WIP schedule

After entering all project information, review the calculated results and check column R for any review flags.

The template identifies certain conditions that may require attention, including missing cost estimates, forecast project losses, and costs exceeding estimated totals.

Before finalizing your report, compare project costs and customer billings with your accounting records, confirm that the cost-to-complete estimates are current, and investigate unusual profit margins or billing differences.

You should also review the schedule with the project manager or person responsible for the job. They can help identify outstanding subcontractor costs, remaining work, and potential budget changes that may not yet appear in your accounting records.

Once reviewed, save a dated copy of the WIP schedule for your monthly financial reporting records.

How to interpret a construction WIP report

Completing your WIP schedule is only part of the process. The real value comes from understanding what the numbers tell you about each project's financial performance. Pay particular attention to overbilling, underbilling, changes in expected profit, and projects where costs are increasing faster than anticipated.

Identify overbilling and underbilling

Overbilling and underbilling show the difference between the revenue earned on a project and the amount you've invoiced to the customer. These figures help you assess your billing position and identify potential cash flow concerns.

• Underbilling: Occurs when earned revenue exceeds customer billings. For example, if you've earned $300,000 but billed only $275,000, your WIP schedule shows $25,000 in underbilling. Review whether the unbilled amount is eligible for invoicing under your contract.
• Overbilling: Occurs when customer billings exceed earned revenue. For example, if you've earned $300,000 but invoiced $325,000, your WIP schedule shows $25,000 in overbilling. This can happen when a contractor issues an advance invoice or bills ahead of project completion under the contract's payment schedule.

Neither condition automatically indicates a problem. However, consistently high underbilling may signal delayed invoicing, unapproved change orders, or inaccurate cost estimates. Significant overbilling also deserves attention because the contractor may still need to incur substantial costs to complete the work.

Watch for declining profit margins

One of the most important figures in your WIP schedule is the estimated gross profit at completion. This tells you how much you expect to earn after covering the project's estimated total costs.

Consider our $500,000 office renovation project. The original estimated total cost is $400,000, leaving an expected gross profit of $100,000. Suppose unexpected labor expenses and additional subcontractor work increase the estimated total cost to $440,000.

The project has experienced $40,000 in profit fade, with its expected gross profit margin dropping from 20% to 12%.

If the $240,000 in actual costs remains unchanged, the revised estimate also reduces the calculated completion percentage from 60% to approximately 54.5%. Under the simplified cost-to-cost method, this reduces cumulative earned revenue from $300,000 to approximately $272,727.

This is why updated cost-to-complete estimates are so important. A project can appear to be progressing according to budget while its expected profitability is declining.

Evaluate project cash flow and billing risks

Your WIP schedule can also help identify projects that may require additional working capital. Look at how much you've spent, how much you've billed, and whether customer payments are keeping pace with upcoming project expenses.

For example, a contractor may have incurred $240,000 in project costs and billed $275,000. However, if the customer has paid only $150,000, the contractor still has $125,000 in outstanding invoices. Additional material purchases and subcontractor payments could create cash flow pressure even though the project is expected to be profitable.

To assess this properly, review your WIP schedule alongside your accounts receivable aging report, customer payment records, and upcoming project expenses. Our guide to accounts receivable aging reports explains how to identify overdue customer invoices and prioritize collections. This is important because a WIP schedule tracks cumulative billings, not the cash you've actually collected.

Look for warning signs that need further investigation

When reviewing several projects, focus on figures that indicate a potential change in financial performance.

Compare the current WIP schedule with the previous month's report, particularly the estimated total cost and forecast gross profit for each project. A sudden change in expected profit deserves investigation, even when the project's billings and actual expenses appear normal.

For construction businesses handling multiple jobs, reviewing these warning signs monthly can help identify projects that need attention before cost overruns and billing delays become more difficult to manage.

How to use QuickBooks Online Advanced to prepare a WIP schedule

QuickBooks Online Advanced can help construction businesses organize project costs, track customer billings, and monitor job profitability. You can use its project tracking and reporting features to gather the accounting information needed for your WIP schedule, then transfer those figures into our downloadable Excel template.

1. Track project income and expenses

Start by enabling Projects in QuickBooks Online Advanced and creating a project for each construction job. Assign related transactions, including material purchases, subcontractor bills, labor costs, and customer invoices, to the appropriate project.

Keeping these transactions organized helps you monitor actual job costs and reduces the risk of missing expenses when preparing your monthly WIP report.

2. Review project costs and customer billings

Open the Projects section and select the construction job you want to review. Use the available project reports to examine income, costs, and profitability. Where applicable, you can also compare estimated costs against actual spending to identify budget variances.

Review customer invoices to determine cumulative billings through the reporting date. Make sure the costs and billings cover the same reporting period before transferring them to your WIP schedule.

3. Transfer the figures to your WIP template

Enter the actual job costs from QuickBooks into the Costs incurred to date column and cumulative customer invoices into the Billings to date column. Add the revised contract value and estimated cost to complete based on your current project records and forecasts.

The template will automatically calculate the completion percentage, earned revenue, estimated gross profit, and overbilling or underbilling.

Note: QuickBooks Online Advanced provides project accounting and profitability reporting, but dedicated construction WIP reporting may require the QuickBooks Construction add-on. Our Excel template offers a way to prepare a WIP schedule using project data from your accounting system.

If you need more advanced construction-specific features, such as project scheduling, field time tracking, or subcontractor coordination, check out our best construction software that integrates with QuickBooks Online to explore tools that can work alongside your accounting system.

Common construction WIP reporting mistakes to avoid

Even with an automated WIP report template, inaccurate project data can lead to misleading completion percentages, earned revenue, and profit estimates. Here are common mistakes to avoid:

• Using outdated cost-to-complete estimates: Failing to account for rising material prices, additional labor, or subcontractor costs can overstate project profitability. Review and update remaining cost estimates with your project manager monthly.
• Missing or incorrectly assigned job costs: Expenses recorded under the wrong project or unrecorded subcontractor bills can distort your WIP calculations. Accurate WIP reporting starts with reliable bookkeeping records. For more guidance on recording transactions, reconciling accounts, and keeping financial information current, read our bookkeeping and accounting tips for small business owners.
• Including unapproved change orders: Adding pending change orders to contract values without assessing whether they qualify for revenue recognition can overstate expected revenue. Track pending changes separately and review their accounting treatment.
• Confusing customer billings with earned revenue: Progress invoices may be issued before or after the related work is completed. Compare cumulative billings with earned revenue to identify significant differences.
• Overlooking retainage and unusual costs: Retainage affects collections, while certain costs, such as abnormal waste or uninstalled materials, may require special treatment when measuring project progress. Review these items before finalizing the schedule.

Frequently asked questions (FAQs)